Compass Minerals International Inc's Dividend Analysis
Assessing the Sustainability of Compass Minerals International Inc's Upcoming Dividend
Compass Minerals International Inc (NYSE:CMP) recently announced a dividend of $0.15 per share, payable on 2023-12-20, with the ex-dividend date set for 2023-12-08. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Compass Minerals International Inc's dividend performance and assess its sustainability.
What Does Compass Minerals International Inc Do?
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Compass Minerals currently produces two primary products: salt and specialty potash fertilizer. The company's main assets include rock salt mines in Ontario, Louisiana, and the United Kingdom, and a salt brine operation at the Great Salt Lake in Utah that produces sulfate of potash and magnesium chloride. Compass' salt products are used for deicing and also by industrial and consumer end markets. The firm's sulfate of potash is used by growers of high-value crops that are sensitive to standard potash. Compass also sells fire retardants, with its magnesium chloride-based products used to combat forest fires.
A Glimpse at Compass Minerals International Inc's Dividend History
Compass Minerals International Inc has maintained a consistent dividend payment record since 2004, with dividends currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Compass Minerals International Inc's Dividend Yield and Growth
As of today, Compass Minerals International Inc currently has a 12-month trailing dividend yield of 2.46% and a 12-month forward dividend yield of 2.46%, suggesting an expectation of the same dividend payments over the next 12 months. Over the past three years, Compass Minerals International Inc's annual dividend growth rate was -40.70%. Extended to a five-year horizon, this rate increased to -30.10% per year. And over the past decade, Compass Minerals International Inc's annual dividends per share growth rate stands at -10.10%.
Based on Compass Minerals International Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Compass Minerals International Inc stock as of today is approximately 0.41%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Compass Minerals International Inc's dividend payout ratio is 1.62, which may suggest that the company's dividend may not be sustainable.
Compass Minerals International Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Compass Minerals International Inc's profitability 6 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 8 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Compass Minerals International Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Compass Minerals International Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Compass Minerals International Inc's revenue has increased by approximately -0.10% per year on average, a rate that underperforms approximately 75.38% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Compass Minerals International Inc's earnings increased by approximately -22.90% per year on average, a rate that underperforms approximately 77.2% of global competitors.
Next Steps
Considering Compass Minerals International Inc's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, investors should weigh these factors carefully. While the company has a history of consistent dividend payments, the negative growth rates and high payout ratio may raise concerns about the long-term sustainability of its dividends. Value investors should monitor the company's future earnings reports and industry trends closely to make informed decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
